HMS Legal Blog

Second Time is the Charm for Natural Gas Supplier Parties!

In a binding poll of the issues taken at its September 17, 2015 Public Meeting, the Pennsylvania Public Utility Commission (“PUC”) unanimously voted in support of the Natural Gas Supplier Parties’ (“NGS Parties”) request to modify the way Columbia Gas of Pennsylvania (“Columbia”) refunds back to customers’ their share of off-system sales revenue. 

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In an effort that is likely to fall short of the expectations of more than a few participants, the Pennsylvania Public Utility Commission (“Commission”) officially shared its vision of the next steps for encouraging more competitive electricity markets in the Commonwealth.

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In a long anticipated Tentative Order, the Pennsylvania Public Utility Commission (“PUC”) finally revealed its vision for the “end state” of the retail electricity market in Pennsylvania.  The problem; many observers believe that the “cure” will kill the patient.

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First Energy Pays Price for Being First

The Pennsylvania Public Utility Commission (“PUC”) caused quite a stir with its August 16, 2012 Order[1] that partially approved the jointly filed default service plans of the four First Energy electric utility affiliates serving in Pennsylvania.

[1] Joint Petition of Metropolitan Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company and West Penn Power Company for Approval of their Default Service Programs, Docket Nos. P-2011-2273650 et al.  (Order entered August 16, 2012)(“First Energy Order”) .

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PUC Denies PPL Migration Rider

Providing a win to competitive suppliers, the Pennsylvania Public Utility Commission (“PUC”) at its July 19 public meeting unanimously denied PPL’s request for a migration rider for default service customers.

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PA PUC Requested by Statutory Advocates and Two NGDCs to Examine The Practice of Natural Gas Flexible Pricing or Negotiated Discount Rates

Historically the Pennsylvania Public Utility Commission (PUC) has permitted natural gas distribution companies (NGDCs) to use flexible pricing or “flex” contract rates to attract or retain large customers who have other energy alternatives.  The reasoning has been that “half a loaf is better than none,” and that such revenues, which cover and exceed marginal cost, contribute positively to overall cost of service.  The result is a benefit to the large customer, the utility, and all customers generally. Moreover, in terms of retaining a customer, the argument in favor of the status quo is that other ratepayers benefit as they do not bear the revenue burden of stranded investment or a smaller revenue pot over which to apply costs.  The NGDCs have generally been able to recover from other ratepayers the difference between the “flex” rate and what would have otherwise been charged under an ordinary general tariff rate.

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PUC ALJ Limits Ability of Potential Competitors To Protest NGDC Service Territory Application

Does a natural gas company that is not currently authorized to provide service in a  territory, but with  future plans to file for such authorization,  have standing to contest another gas company’s application to provide service in that same territory?  This issue was addressed in an Initial Decision by ALJ David A. Salapa, who answered it in the negative.  Application of Leatherstocking Gas Co., L.L.C. for Approval To Supply Natural Gas Service to the Public, A-2011-2275595 (Initial Decision, issued March 20, 2012).

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PUC Proposes Structure for Transitional Electricity Market

The PUC yesterday took a big first step toward creating an electricity market where most customers are served by competitive suppliers, and not by utilities, and unanimously voted to adopt recommendations for the next round of default service plans that will be filed by Pennsylvania’s electric utilities.

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Electricity Default Service Plans – The Next Generation

Two electric distribution companies, First Energy and PECO Energy Company, have filed their default service plans for service that will begin in 2013 – before the PUC has issued final guidance on what those plans should include.

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On December 15, 2011 the PUC issued two orders designed to make Pennsylvania’s retail electricity market fully competitive. Both orders are a product of the PUC’s ongoing Investigation of Pennsylvania’s Retail Electricity Market (“RMI”), Docket No. I-2011-2237952. The first order (“RMI Final Order”) addresses the desired features of soon-to-be-filed electric utility default service plans and programs that will be implemented as part of those plans. The second order (“RMI Work Plan Order”) provides granular detail on specific components, including consumer education, accelerating of switching time frames, customer referral programs, and retail opt-in auctions.

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PUC Announces Agenda for November 10th Retail Electricity Markets Investigation Hearing


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PUC Proposes to Amend Competitive Safeguard Regulations

In light of ongoing concerns that incumbent utilities could share customer information, link regulated services with non-competitive services, and either directly or indirectly favor affiliated generators and thereby compromise efforts to achieve a truly competitive market, the Public Utility Commission at its August 25, 2011, public meeting issued a proposed rulemaking to revise existing competitive safeguard regulations at 52 Pa. Code §§ 54.121-123, which have been in effect since July 2000.  Comments on the proposed amendments are due in mid to late October, 45 days from the date of their publication in the Pennsylvania Bulletin.

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PUC Initiates Phase II of Competitive Retail Electricity Market Investigation

On July 28th, 2011, the Pennsylvania Public Utility Commission entered an Order intended to provide guidance to the PUC Staff and interested stakeholders regarding issues to be addressed in Phase II of the PUC’s Investigation into the competitiveness of Pennsylvania’s retail electric market.  The Phase II process will involve a series of technical conferences to be chaired by the PUC’s Office of Competitive Market Oversight (OCMO) as well as additional en banc hearings.

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Commonwealth Court Upholds Commission Determination That Line Loss Costs Are Not Transmission-Related, Remands Carrying Charge Issue For Reconsideration

Last week, the en banc Commonwealth Court  upheld in Metropolitan Edison Co. v. Pa. Pub. Util. Comm’n, No. 532 C.D. 2010 (Jun. 14, 2011), the Pennsylvania Public Utility Commission’s (“Commission”) decision in two consolidated cases in which the Commission held that “marginal transmission losses” or “line losses” are generation-related costs and are not recoverable from ratepayers under the Companies’ Transmission Service Charge Riders.  In a surprising upset for the Commission, however, the court remanded the case in-part for further consideration on whether Companies should be permitted to collect carrying charges.

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PUC en banc Hearing: A Resounding Success

The PA PUC’s recent public hearing to explore the future of the competitive electricity markets in Pennsylvania was no less than a resounding success according to Chairman Robert Powelson of the Commission.

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PUC Launches Investigation of Pennsylvania’s Retail Electricity Market

In a 4 to 1 vote, the Pennsylvania Public Utility Commission “officially launch[ed] the investigation of the competitiveness of the retail electric market with the goal of making recommendations for improvements to ensure a properly functioning and workably competitive retail electric market.”

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PUC Stalls Met-Ed/Penelec Customer Education Plan

The Pennsylvania Public Utility Commission unexpectedly voted to delay implementation of the electricity shopping Customer Education Program for Metropolitan Edison Company and Pennsylvania Electric Company. The Commission was addressing an audit of the plans, which cost about $900,000 each, when it suspended implementation pending further comment from participants.  The Commission appears to be concerned that, due to lack of electric generation supplier participation in those territories, customer education about competitive alternatives may be premature.

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Pennsylvania Passes 1,000,000 Customer Mark in Competitive Electricity Market

It’s official - Pennsylvania has passed the 1 million customer mark in electricity shopping.  According to the latest weekly update on the Pa. Power Switch website (, the total number of customers switching to an electric generation supplier as of March 23, 2011, was 1,001,062.

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PUC “Opts Out” of Municipal Aggregation

The PUC has ruled unanimously that opt-out municipal aggregation programs violate the Commission’s regulations regarding the standards for changing a customer’s electricity generation supplier.

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PUC Approves New Rules Aimed at Improving Retail Natural Gas Competition

Today, in split vote, the PUC approved new regulations intended to level the playing field for natural gas competition.

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